2018 Annual Results Presentation

April 2019

(A joint stock company incorporated in the PRC with limited liability

under the Chinese corporate name 华泰证券股份有限公司 and carrying

on business in Hong Kong as HTSC)

1

Agenda

22

23

21

Financial overview

Business overview

概要Company overview

24 Development strategy

2

Company overview

Financial overview

Business overview

Agenda

Development strategy

3

2,000

3,000

4,000

5,000

6,000

7,000

01/15 12/15 12/16 12/17 12/18

Shenzhen Composite IndexHang Seng IndexFTSE 100S&P 500Shanghai Composite Index

Performance of key market indices1

Balance of margin loans and

securities lent

Market Environment

Equity and bond issuance amount

1.71.2

4.4

5.6

2017 2018

Stock Bond(RMBtn)

(RMBbn)(RMBbn)

-22.9%

+21.8%

+9.5%

AUM of securities companies

16.9

13.4

2017 2018

(RMBtn)

Low: 756

High: 2,273

0

500

1,000

1,500

2,000

2,500

01/15 12/15 12/16 12/17 12/18

Stock trading volume

-10.4%+2.5%

High: 2,363

Low: 187

Scale of domestic private funds

11.1

12.8

2017 2018

(RMBtn)

Under the ongoing strong regulations and intensifying competition in 2018, the reforms in China capital markets accelerated which

gradually drove innovation and sped up the process of returning to the original function of financial services

Sources: Securities Association of China, Wind, Asset Management Association of China

Note: 1. All indices are rebased to the beginning level of Shanghai Composite Index

0

500

1,000

1,500

2,000

2,500

01/15 12/15 12/16 12/17 12/18

4

Business Highlights

Ranked #1 in terms of brokerage trading

volume of stocks and funds

Source: Company data

Strengthening leadership Pursuing breakthrough

Ranked #1 by ZhangLe Fortune Path in

terms of MAU among PRC securities firms’

apps, MAU exceeding 7 million

Ranked #2 in terms of the balance of

margin loans and securities lent

Ranked #3 in terms of equity underwriting

amount

2,000+ financial advisors, ranked #1 in the

industry in terms of percentage to total

employees

RMB300bn+ financial product sales

Obtained initial long-term issuer rating by S&P

and Moody's respectively as BBB and Baa2,

with stable outlook

Top 3 market maker for SSE 50 ETF

exchange-traded options in terms of market

share

Ranked #1 in terms of the amount of CSRC-

approved M&A transactions

AssetMark’s AUM achieved a steady growth

from 2017 to US$45bn

5

381 369

89 105

2017 2018Total assets Net assets

Business Performance Overview

Source: Company data

Note: 1. ROAE = net profit/average net assets

（RMBmm)

Total assets and net assets

(RMBbn)

(RMB)

6,036 5,009

2017 2018

ROAE1 after deduction of non-recurring gains and losses

6.9%

5.3%

2017 2018

ROAE

Earnings per share after deduction of non-recurring

gains and losses

0.8 0.7

2017 2018

Net profit attributable to Shareholders of the Company

after deduction of non-recurring gains and losses

6

Company Overview

Financial overview

Company overview

Business overview

Agenda

Development strategy

7

31,323

24,507

2017 2018

Strong Profitability Reflects the Advantage of Top Tier Brokers

Total revenue Profit-to-income ratio

(RMBmm)

Operating profit

(RMBmm)

Net profit attributable to Shareholders of the Company

after deduction of non-recurring gains and losses

(RMBmm)

6,036

5,009

2017 2018

11,045

5,489

2017 2018

30.0%

21.1%

2017 2018

8

Wealth management

28.1%

Capital-based intermediary

services24.9%

Institutional services12.7%

Investment management

13.9%

International business12.7%

Others7.7%

Wealth management

25.5%

Capital-based intermediary

services19.5% Institutional

services17.3%

Investment management

11.0%

International business12.0%

Others14.7%

Revenue Mix Remains Stable

2018 Revenue breakdown2017 Revenue breakdown

Source: Company data, financial report (IFRS)

9

80,314

38,046

24,845

21,124

40,095

59,492

104,750

70,998

-

148,975

43,557

46,189

58,947

118,379

55,601

26,656

24,922

67,336

88,590

65,250

-

129,134

61,805

59,991

65,304

As of 31 December 2018

Capital Injection to Support Long Term Development, with Optimized Structure of

Assets and Liabilities

Source: Company data, financial report (IFRS)

As of 31 December 2017

• Issued two tranches of subordinated bonds on Mar 15, 2018 and May 10, 2018,

with total amounts of RMB1.0bn and RMB2.8bn respectively

• Issued one tranche of short-term corporate bond on Jun 11, 2018, with a total

amount of RMB4.6bn

• Issued one tranche of corporate bond on Nov 26, 2018, with a total amount of

RMB4.0bn

Bond issuance

(RMBmm)

Total assets

Other assets

Financial assets

Financial assets held

under resale agreements

Margin accounts

receivable

Cash held on behalf of

brokerage clientsNet assets

Account payable to

brokerage clients

Financial assets sold

under repurchase

agreements

Short-term debt

instruments issued

Long-term bonds

Other liabilities

Liabilities + Net assets

381,483 381,483

(RMBmm)

Total assets

Other assets

Net assets

Account payable to

brokerage clients

Financial assets sold

under repurchase

agreements

Short-term debt

instruments issued

Long-term bonds

Other liabilities

Liabilities + Net assets

Financial assets

Financial assets held

under resale agreements

Margin accounts

receivable

Cash held on behalf of

brokerage clients

368,666 368,666

Long-term loans due

within one year

10

Financial overview

Business overview

Agenda

Development strategy

Company overview

11

Established an Integrated Online-and-offline Wealth Management System

Integrated online-and-offline wealth management system

Mobile wealth

management platformFinancial advisor

working platform

241 Securities branches

42 Futures branches

～70%

ZhangLe Fortune Path Wealth management service platform

Branches located in

economically developed

regions

Establishment of Intelligent Network

Connected

Monthly active users 1

Cumulative downloads and

users on platform

Source: Company data, Analysys source

Note: 1. Number of monthly active users as of December 2018

Login users in 2018

Average logins per month

Daily active user

Financial

advisorsFinancial

products

Online + offline

platform

Trading products

7,129k

45,697k

4,188

3,264

560

2,194 financial advisors

Financial advisors

contributed 29.0% to all total

number of employees,

ranked NO.1 among the

industry

Wealth management products

Strategy products

Online: intelligent service platform Offline: professional service network

Refined

operation

2,194

5,378

HTSC

Financialadvisors

Other staff

12

55 59 44

69 9154

124 150

98

2016 2017 2018Margin financing and securities lending Securities-backed lending Stock repurchase

Market share

Established an Integrated Online-and-offline Wealth Management System (Cont’d)

Balance of capital-based intermediary business

(RMBbn)

Maintain a market leading position in stocks trading volume with expanded client base; Financial product sales increased significantly;

Continuous leadership in capital-based intermediary services and enhanced risk management capability

5.7%

Sales volume of financial products1

Source: Company data

Note: 1. Tiantianfa is not included in the sales volume of financial products and the number of financial products for sale

(RMBbn)

182 204

300

2016 2017 2018

3,104 3,274 5,456

Number of financial

products for sale

11,12012,166 12,780

2016 2017 2018

(Thousands)

Number of brokerage and wealth management customers

24.5

19.0 14.3

2016 2017 2018

1

7.5%

(RMBbn)

Equity and fund trading volume

Ranking 1 1

Market share 8.3% 8.9%

5.6%

13

Established an Integrated Online-and-offline Wealth Management System (Cont’d)

7,129kMonthly Active

Users (MAU)1

45,697k 633k

97%

Cumulative downloads

and users on platform

% of new

account opening

37%% of transaction

value

87%

% of transacting

clients

# of accounts opened on

mobile terminals

ZhangLe Fortune Path maintained industry wide brand

leadership in 2018

ZhangLe Fortune Path ranks

No.1 amongst Apps developed

by securities companies in

terms of average MAU

Continue enhancing service capabilities and competitive advantages by integrating big data and AI into financial service

– well positioned in FinTech

Upgraded Smart Family

8 new innovations

Big data-enabled intelligent

investment strategy

Tainiu Intelligent Investment

A new WM service model: “person + platform”

ZhangLe Experts + ZhangLe School

Adhering to the client-centric principles and leveraging the customer acquisition business, ZhangLe Fortune Path built a new online-

offline integrated retail business system with focuses on trading, membership and wealth management account services

ZhangLe Fortune Path driving customer service and

customer stickiness

Real-time asset estimation

Intelligent real-time account

Refined operation model

ZhangLe U membership system

预估总资产

11,326.98

Source: Company data, Analysys source

Note: 1. Number of monthly active users as of December 2018

14

198

202

204

2016 2017 2018

158

111 138

2016 2017 2018

Enhanced Financial Service Capabilities in Institutional Businesses

Source: Company information, Wind, Mergermarket

Note: 1. Number and amount of CSRC-approved M&A transactions

2. Number of M&A transactions in Mainland China & Hong Kong according to Mergermarket, based on initial announcement dates

3. Scope of statistics includes IPOs, private placements, rights issues, preferred shares, convertible bonds and exchangeable bonds

4. Scope of statistics includes local government bonds, bonds issued by policy banks, financial institution bonds, enterprise bonds, corporate bonds, medium-term notes, short-term financing bills, targeted instruments, international

institutional bonds, government-backed bonds, asset-backed securities, convertible bonds, exchangeable bonds and other bonds

(RMBbn) (RMBbn)

Ranking 3 5 3 Ranking 7 7 8

74 69 39Number

of deals274 329 432Number

of deals

Rank Institution Number of transactions

1 Huatai United Securities 44

2 CICC 44

3 Goldman Sachs 33

4 CITIC Securities 33

5 China Renaissance 33

6 Deloitte 32

7 China Securities 26

8 UBS 25

9 Somerley 24

10 Citi 23

189

41

110

2016 2017 2018

(RMBbn)

Ranking 2 4 1

21 11 15Number

of projects

Equity underwriting amount and Rank in terms of deal

number3

Bond underwriting amount and Rank in terms of deal

number4

Capabilities of full-service offerings and client responsiveness further strengthened, building on the integrated investment

banking platform and the full service chain, with adherence to the client-centric principles, support to technology companies and

synergies across onshore / offshore, exchange / OTC markets

NO.1 in terms of M&A transaction value1 No.1 by the number of M&A transactions in Greater China2

1515

Source: Company information, Wind

Note: 1. Market capitalization as of December 31, 2018 for the TMT and healthcare clients served since 2012

2. Number of completed transactions that Huatai acted on for those over 70 TMT and healthcare clients served since 2012

>70 clientsin TMT and healthcare sectors

since 2012

RMB1.7tncombined market capitalisation1

>180 completed transactions2

New retailHealthcare

Technology Smart

manufacturing

Best-in-class Investment Banking Franchise Capturing New Economy Opportunities

Applied our know-how to provide technology companies with customized investment banking services throughout their entire life

cycle and completed a number of landmark transactions

16

Enhanced Financial Service Capabilities in Institutional Businesses (Cont’d)

Investment and trading business optimized investment strategies to adapt to market changes and challenges; continuous investment

in PB business, research and institutional sales strengthened integrated service capabilities for institutional clients

50 54

73

41

53

71

2016 2017 2018Custody Administration

546 436

320

2016 2017 2018

Investment and Trading

Scale of fund under custody and administration services1

(RMBbn)

Mutual Funds trading volume

(RMBbn)

Equity investment and trading1

Trade various fixed-income

securities and derivative

instruments

Value FICC research and develop

trading strategies to identify

attractive investment opportunities

Provide market-making services

in the interbank bond market

Expand to include commodities

and foreign currencies

investment and trading

CAMS: Proprietary intelligent

investment and trading platform to

improve the credit asset pricing

capabilities

Licensed to conduct CSRC

approved cross-border

derivatives business and OTC

options trading

OTC options

Equity return swaps

Structured notes

Cross-border derivatives

Global indices

Stocks

Funds

Commodities & fixed-income products

Underlying securities of

OTC derivatives

Note: 1. Business scale of administration services excludes the business scale of asset management subsidiary

Institutional Investor Services

FICC business2 OTC derivatives3

Enhance big data-enabled

market monitoring system

Promote the construction of

big data platform

Build a big data-enabled

professional investment

research team

Improve industrial chain research and

tracking and create multi-layered equity

pool system

Promote business model transformation to

trading focus

Offer and trade OTC derivatives

Improve strategy development system

and launch big data transactions business

17

249

464

639

25

37 40

2016 2017 2018

Offering size (RMB`00mm) Number of offerings

129 109 113

719 741 583

35 63 81

883 918 783

2016 2017 2018

Collective AM Targeted AM Special scheme AM Mutual fund

AUM of securities firm asset management

Comprehensive Asset Management Platform with Significant Scale

Source: Company information, Wind

AUM of affiliated mutual funds

Size of ABS business

(RMBbn)

AUM ranking 2 2

391 440

563

254 285 266

2016 2017 2018

Mutual funds Other funds

(RMBbn)

3 Ranking 3 3 4

Asset management scale maintained market leading position, with enhanced active management capabilities and business

returning to the original function. ABS ranked among top of industry with leading innovation capabilities. Affiliated fund

companies witnessed steady growth

97 83

98

2016 2017 2018

(RMBbn)

18

No. 3 in the US TAMP industry with

10.2% market share1

Notable Progress in International Business, Integrated into the Group’s Full-service Chain

International business grew notably due to enhanced cross-border synergies. Huatai Financial Holdings deepened the integration

into the Group’s operation and provided comprehensive cross-border financial services to onshore and offshores clients.

AssetMark continued strengthening wealth management capabilities with steady growth in both AUM and business results

Prominent growth in investment banking

business and research capabilities

Leadership in wealth management

Asset management excellence

Asset manager due diligence and

selection

Portfolio construction and analytics

Reporting and performance analysis

Compelling technology

Combination of external cooperation

and internal R&D

An integrated and open platform

Digital financial advisory tool

Simulation investment portfolio tool

(PortfolioEngine ® 2.0)

One-stop terminal for investors

(Investor Portal 2.0)

Superior services offerings

Operational support

Expert consultation

Industry-leading management

model

Back-office support

Thought leadership

The Asset Triple A Country Awards – Best corporate and

institutional adviser in Hong Kong (securities)

The total transaction value of cross-border and structured finance

projects completed in 2018 exceeded US$2bn

An initial “BBB” rating to Huatai

International by S&P

#4 in sponsorship of sizable HK IPOs among

Chinese banks & securities firms in 2018

#2 in terms of the best A-H research teams by

"Institutional Investor ” in 2018

42,400 44,855

2017 2018

5.8%

AUM (US$mm)

Financial advisors

Accounts on the platform

218,400

7,500

Market and scenario analysis

Portfolio rebalancing and

tracking

Note: 1. As of 3Q2018

19

Business Development and Operation Management Empowered by Technology

Reinforcing the overall positioning of “development driven by technology and acceleration of digital transformation” to create

advanced customer service platform, powerful digital platform and secure and efficient infrastructure

ZhangLe

Fortune Path:

drive customer

growth and deliver

first-class servicesMobile

platform

Secure and efficient infrastructure

INCOS: One-stop

self-service platform

that covers the full-

service chain for

managersBusiness

operation

Advanced customer service platform

MATIC: ecosystem-

based trading

service platform

customized for

professional

investorsTrading

platform

Enterprise Risk

Management Platform for

risk monitoring, warning and

preventionRisk

management

Powerful digital management

Cloud Data security

Titan: active and

responsive information

security product to help

monitor the data security

CAMS: an intelligent

investment and

trading platform

based on data

analytics for credit

asset pricingCredit

analysis

Investment

research

Xquant: conduct

quantitative

research applying

big data and AI

technology

Insight: market

Information service

platform

Digital

system

Wealth

management

Platform: visualize

and capture wealth

management

customer demand

Market

information

Client

relationship

CRM: improve

customer

relationship and

enhance business

efficiency

Industry-leading hybrid cloud

structure to secure business

stability and continuous delivery

20

Ownership Reform Promoting Stronger Corporate Governance

Diversified shareholder base and improved

corporate governance

New Board of Directors from strategic investors

Improved management remuneration scheme,

introducing employee stock ownership plan for

core employees

Formed long term strategic partnership with

Alibaba and Suning

Note: 1. New shareholders brought in through the A-share private placement which was completed in Aug 2018

On Aug 2, 2018, HTSC completed a RMB14.2bn A Share private placement to strategic investors

Embraced modern management system and

established a market-oriented human

resources management mechanism

Improved the Company’s competitiveness and

injected new momentum to the high quality

development

Use of proceeds

Raising capital, replenishing working capital, expanding business scale and optimizing business structure

Strengthening capital base to support the Company’s long-term development:

• Capturing new business opportunities

• Improving operational flexibility and risk management capabilities

• Continuing to strengthen competitive advantages and market position

New shareholders1

Others

21

139.7%

130.4%

139.7%

2016 2017 2018

246.0%

619.3%655.5%

2016 2017 2018

21.4%

19.1%

24.6%

2016 2017 2018

206.7%193.8%

288.3%

2016 2017 2018

Improving the Group’s Capability of Risk Coverage and Risk Management with the

Construction of Technology System

Risk coverage ratio Liquidity coverage ratioCapital leverage ratio

Strengthening the application of FinTech in risk management and setting up technology systems to enhance risk detection,

monitoring and response capabilities; a centralized comprehensive risk management system, that improves the risk coverage

across different businesses and subsidiaries of the Group, developed the core competitive advantage

Net stable funding ratio

Full coverage

A centralized, professional and comprehensive risk management system emphasizing full coverage of all

business lines and types of risks and engaging the entire staff of the Group

Quantification

Advanced

technology

Governance

A proprietary Enterprise Risk Management Platform covering all businesses, subsidiaries and branches and

enhancing the Group’s risk detection, risk monitoring and response capabilities

Capable of covering, monitoring, measuring, analyzing and coping with different types of risks and adapted to

business transformation and market changes

100% 100%8% 100%

Source: Company information

Note: 1. Red dotted lines represent regulatory requirement

A highly effective governance framework along with the risk management team to oversee and implement risk

management and internal control

22

Financial overview

Business overview

Agenda

Development strategy

Company overview

23

Development Strategy for 2019

Adhering to the client-centric principles and expanding the customer base and customer assets

To launch the tech-empowered “two-pronged” development strategy for wealth management and institutional services and to

expand the client base and AUM by leveraging the systematic platform, building an open platform for the future

Two-pronged

strategy

Market-driven

mechanism

Customer-driven

structure

Intelligent operation in

services

Cross-border

interaction

Digital transformation

in technology

Wealth

management

Institutional

services

In place on wealth

management and

institutional services

To fully implement

ownership reform and

adopt market-oriented

employment mechanism

To create customer-

driven organizational

structure and mechanism

throughout the full service

chain

To develop efficient,

detail-oriented and

intelligent customer

service

To set up a connected,

sharing and synergic

international business

platform

Digital reconstruction

of the underlying

structure to improve

efficiency

24

Development and Business Strategies for 2019

Wealth

Management

Institutional

Services

Investment

Management

International

Business

Establish a new online-offline integrated operation model with trading services delivered mainly online and asset allocation services for affluent and HNW

customers delivered offline

Leverage financial products and open platforms to enhance customer acquisition efficiency and accelerate the transformation on asset increment from trading

to wealth management and asset allocation services

Develop an integrated financial advisory system operated by headquarters and strengthen the unified output from asset allocation strategies based on

investment research

Strengthen the core competence in risk pricing, construct a strong data platform for credit evaluation, and innovate the customer service and profit model for

margin financing and securities lending

Develop a multi-layered institutional client ecosystem with institutional sales as the channel and trading and products at the core, promoting the classification of

clients and the layering and grading of clients’ demand

Adhere to the "key client strategy", enhance the capabilities of cross-markets and integrated service with the vision to engage with fast-growing clients, and

strengthen the full service chain with buy-side mindset

Transfer investment and trading capabilities into client service capabilities, building on the client-driven platform with a focus on trading

Construct research data platform to improve the research efficiency; step up the investment in key industries and the linkage of onshore & offshore markets to

develop a strong value discovery mechanism

Develop advantages in the full service chain of PB business, capturing the opportunity in new favorable asset management regulations and focusing on key

geographies and top clients

Develop product systems for retail and institutional clients by integrating the resources from the Group; consolidate the leadership in fixed income products and

refine equity and cross-border products by reshaping product lines through innovation; strengthen ABS business

Fully exert the advantages of investment banking in client resources and expand private equity business with buy side mindset to enhance the return on capital

investment

Expand development space in international business by leveraging local resources and deepening cross-border synergies in full service chain including

customer service, products, sales and trading

Integrate the platforms and resources in international business to improve operational efficiency, continue to enhance the market position of AssetMark, and

strengthen strategic synergies between Mainland China and Hong Kong